By Sophie Ryan, Comparison Expert at iSelect

Australians could finally feel some much-needed cost-of-living relief in their electricity bills, with benchmark pricing forecast to fall in most parts of the country. Early signs for local demand and wholesale costs have been positive, but just as the clouds start to part, a new storm may be brewing, with overseas tensions threatening to reintroduce volatility.

With tensions in the Middle East now in focus, questions are once again being raised about the impact on energy prices. Here’s the story so far.

Prices projected to drop

In some rare, positive news, east coast energy regulators say electricity prices could be on a downward trajectory for a change.

New draft benchmark pricing for NSW, South Australia, ACT, southeast Queensland and Victoria suggests customers on default market offers could see a discount if new pricing is confirmed for 1 July.

It’s all thanks to falling wholesale costs and reduced demand driven by the rapid uptake of rooftop solar.

This reduced reliance on the grid is helping to stabilise the system and is expected to put downward pressure on retail prices over time.

So after a prolonged period of increases, Australia’s energy market is beginning to shift. For consumers, this signals a more positive outlook than in recent years.

The bad news, all of these important gains that Australians have been working so hard towards could be scuppered if global instability puts pressure back on supply and demand.

The wildcard: global conflict

Australia is not immune to global energy dynamics. Gas prices, which influence electricity costs, are still tied to international markets. Conflict in the Middle East has the potential to affect global supply, investor confidence and pricing, which could in turn introduce renewed volatility.

At this stage, it’s unclear whether these tensions will materially impact Australian energy prices, but they remain an important watchpoint.

Households still feeling the squeeze

While global events remain outside of household control, there are still ways to stay proactive.

If you’re on a default market offer, you’re already probably paying more than you need to for your electricity supply.

Think of the pricing benchmarks as like a safety net – they are there to protect consumers from extortionate or unreasonable prices, but they are often not the best deals on the market.

Even if benchmarks do eventually fall, we encourage people to shop around to look for a cheaper deal in any case.

Around 73 per cent of households in the National Electricity Market could save by reviewing their energy plan or switching providers. Ensuring you’re at a competitive rate, combined with mindful energy use, can help maximise any savings as prices begin to ease.

The good news on that front is you don’t have to wait until benchmark prices change on 1 July to start potentially saving if you switch to a better plan.

For Australians, it’s a moment for cautious optimism. Prices may be easing, but the risk hasn’t disappeared – so it pays to stay alert, not assume the worst is over.

INDEPENDENT NEWS IS IMPORTANT.

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